Karnataka HC declines relief to Ozone Urbana in homebuyer cheating case
Karnataka High Court refuses to quash criminal and money-laundering proceedings against Bengaluru builder Ozone Urbana and its promoters.
The High Court of Karnataka has declined to quash criminal cases and money-laundering proceedings against Bengaluru-based real estate firm Ozone Urbana Infra Developers and its promoters, who face allegations of cheating homebuyers by collecting large advances and diverting the funds away from the construction of promised apartments.
Justice M. Nagaprasanna passed the order while dismissing petitions filed by the company and its promoters, including Vasudevan Sathyamoorthy and his wife Prua Vasudevan. The petitioners had sought to set aside FIRs registered on complaints by aggrieved homebuyers, two Enforcement Case Information Reports (ECIRs) filed by the Enforcement Directorate in 2022 and 2025, and the agency's provisional attachment of assets worth ₹423.38 crore.
The court observed that the complaints revealed a recurring pattern in which buyers were drawn in through attractive subvention schemes, tripartite agreements and assurances of timely possession, only to be left without either homes or refunds. In one instance, a complainant found that a flat booked in 2017 had been sold to another person in 2021 without the buyer's knowledge or consent.
"The money is received, the property is not delivered, the loan burden remains with the homebuyer, and the very property promised to him is allegedly sold to another," the court said, adding that such allegations went well beyond a mere contractual default.
ED proceedings
The company had contended that the ED proceedings were illegal because the predicate offences — the homebuyers' FIRs — had either been stayed or quashed. The court rejected this argument, noting that the 2025 ECIR rested not only on the earlier FIRs but also on a CBI FIR registered on the directions of the Supreme Court to probe an alleged collusive nexus between builders and financial institutions to cheat homebuyers.
That CBI FIR alleged that Ozone Urbana, in connivance with officials of Indiabulls Housing Finance (now Sammaan Capital), devised a subvention scheme promising "No Pre-EMI till delivery of possession" to lure buyers. Loans were allegedly disbursed directly to the builder without adequate due diligence, and the company later defaulted on pre-EMI payments, leaving homebuyers saddled with EMIs for flats that were never handed over.
The ED's provisional attachment order, issued on October 4, 2025, covered properties worth ₹423.38 crore, including unsold inventory and land parcels belonging to the company and its promoters. The agency alleged that of roughly ₹927.22 crore collected from more than 1,351 homebuyers, a substantial portion was siphoned off to group companies and personal accounts.
The court also underscored the gravity of economic offences, noting that they affect a large number of stakeholders, particularly homebuyers who invest their life savings in the hope of owning a home.